Proposals to build on: How about we crowd-implement mega public projects?

In my blogpost from two days ago, I made some proposals for a concerted effort to make the northern frontier of Kenya more secure – from Lokichoggio and Sibiloi in the Northwest to Pokot and Marsabit slightly further south to Garissa, Wajir and Mandera. A specific proposal that I made is that we should build a network of roads across the northern frontier connecting them to the rest of the country – and by roads, I mean good quality, wide highways.

I think that such development projects are turnkey and can go far in the development of Kenya as a prosperous nation, and I would think that it would also have some impact in improving the security of the nation – simply because of the establishment of towns and security installations like police stations and barracks.

Today, I go a little further in thinking about these sort of projects – and I want to propose one other before I go too far in this blogpost:

Could we have a eight-lane freeway (four lanes each way) from Mombasa to Kisumu? Lets also have a six lane freeway coming from Isibania (in the South West of Kenya) via Migori, Kisii, Kisumu, Kakamega, Webuye, Kitale to Lodwar – or if we can be really serious, to Nadapal. Let’s have another six lane freeway from Taveta via voi, Hola, Garissa, Dadaab, Habaswein to Wajir. Lets have one from Wajir to Kitale .

You are thinking, “Kags, you are nuts. Go see a doctor.”

Perhaps, I am nuts but lets entertain the thought for a second. Suddenly time spent traveling from Mombasa to Kisumu is halved. Suddenly, getting to Wajir is not a terribly hard thing. It becomes conceivable for someone to live in Gilgil and commute to Nairobi (by the way standard gauge railway would be operational by then – especially for cargo). Wouldn’t Hola become more developed by traders? Wouldn’t Webuye become a city sooner?

Isn’t it conceivable that instead of Konza, Marsabit could become Kenya’s tech city? And Wajir, Garissa and Hola Kenya’s Dubai?

I’ll leave that to ferment in your brain for now and instead turn to how we finance and build such monolithic projects without sinking the country entirely into an abyss of debt, never to recover.

Some of the PPPs in progress now include Standard Gauge railway and other mega projects. I suggest however that we don’t do it with the mega-project approach. We take into consideration that the more Kenyans that are gainfully employed in a way that can make them more financially prosperous, the better. (by we, I mean the government, of course.

My proposal is that these huge undertakings are taken as follows:

The government publishes a technical standard for the road construction and maintenance, right down to the smallest consumable.

The government gets a design for the route of the entire freeway network done by a couple of consultants.

The government then publishes PPP tenders for 100km stretches. The PPP would look like this. Al Kags Company (ALC) bids and wins the tender to construct 100km of the 8 lane freeway. To bid for it he built a consortium of companies that include financiers, a road engineering firm, equipment owner etc.

Having won the tender, ALC constructs the road and agrees to maintain it at the published standard for 10 years, during which the government will pay a standard “per kilometre” lease rate.

The government could finance this through a publicly traded 10 year bond or shorter term notes and bills, meaning that it has taken a loan from the market (see video below)

So with the above model, we would have hundreds of companies bidding and making money (therefore growing the market employing youth and so on. The country would benefit from having the road network and a vastly expanded economy.

I would propose that we expand the PPP model to other areas too that have social value. My take is that the government does not need to own the buildings that house hospitals, police stations and schools.

How about we get the government to give the dispensaries and police stations to Kenyan investors, who would be required to upgrade them and maintain them for 10 years and then lease them back to the government? This makes the business of making sure the police station is well equipped and clean, the business of the investor and the police service can manage the services. Wouldn’t this free Kenyans to build police stations all over the country for the police to lease?